Kindle Fire - All posts tagged Kindle Fire

Amazon.com Inc. will report its second-quarter results after Thursday\’s market close. Analysts surveyed by FactSet estimate Amazon will report a loss of 16 cents a share on $19.33 billion in revenue.

4:15 pm (EDT)

This is Rex Crum of MarketWatch. We are awaiting the release of Amazon's second-quarter results, which will be followed by a thrilling earnings conference call hosted by Amazon Chief Financial Officer Tom Szkutak.

At first blush, Amazon\’s launch of new Kindle Fire tablets on Wednesday would seem to pose little threat to Apple, who remains the market leader in the category by a long shot.

Amazon, Getty Images

But the new Kindle Fire HDX, as Amazon calls its new souped-up tablet offering, will likely keep the pressure on Apple\’s gross margin line, which has already been on a downward trend over the last year — in part because of the company\’s aggressive pricing of its iPad tablets against growing competition from lower-priced rivals using the Android operating system.

And Amazon is the lowest of the low, price-wise. The new Kindle Fire HDX with 16GB has a slightly smaller display than the iPad mini of the same memory configuration. It also has a newer, faster processor with the Snapdragon 800 from Qualcomm. It\’s also $100 cheaper than the iPad mini, at least for the version that includes \”special offers\” from Amazon\’s advertising partners.

Amazon.com and Microsoft Corp. may be stepping up their efforts at building their own consumer electronics devices, according to reports Thursday afternoon by the Wall Street Journal.

Amazon is working on its own line of smartphones — including one with a 3D screen, according to the Journal. In a separate story, the Journal said Microsoft is developing plans for a set-top box for television sets, similar to those made by companies like Apple and Roku. Both articles cited unnamed sources, and emphasized that the products are still under development, with no assurances that they will actually come to the market.

Both companies already sell a limited line of devices. Amazon is known for its Kindle e-reader and for its Kindle Fire tablets. Microsoft launched its Surface tablet last year, running on its new Windows 8 operating system.

Amazon.com cut the price of its two larger Kindle Fire tablets on Wednesday, leaving open the question of whether the retailer is trying to capitalize on strong sales momentum — or struggling to juice up business in what has become a brutally competitive market.

Investors seem uncertain as well. Amazon\’s shares dipped into the red by a fraction when the announcement crossed the wires, only to flip back into slight positive territory later. But the online retailer\’s stock has been on a tear — surging nearly 50% over the last 12 months and setting a new all-time high in late January above $280. The stock was currently at $274.35.

While most of the misfortune that has befallen Apple Inc.\’s stock has revolved around fears about the iPhone business, the company\’s foray into the world of small, cheap tablets is another notable factor in what might prove to be a long-term shift in its business model.

Getty Images

Apple\’s iPad mini

Apple introduced the iPad mini late last year. At the time, investors were surprised that the company did not seem to be aggressive enough in going after the 7-inch, $199 tablet space that was being carved out by the Samsung Galaxy Tab, Amazon.com\’s Kindle Fire and Google\’s Nexus 7. The iPad mini sported a larger screen and — with a starting price of $329 — was about 65% higher than its competitors in that segment.

That did not seem to hurt demand for the device any. Apple shipped nearly 23 million iPad units in the December quarter, a record number for the product line that still rules the overall tablet market by a wide margin. While the company does not break out shipment data by specific unit, Apple said the mini was \”a tremendous hit\” in its conference call to discuss the quarter\’s results last week.

While Apple is not expected to give up its strong lead in the tablet market, one analyst predicted on Wednesday that Samsung and Google may gain share at the expense of the popular iPad this year.

In a report Wednesday morning, the analyst team at Pacific Crest Securities predicted that global tablet shipments would surge by 61% in 2013 from last year\’s level, to about 172 million units.

The iPad is expected to hold onto about 50% of global sales for the year, though that is down from the estimated 62% of global sales that Apple\’s tablet accounted for in 2012. Those numbers may get more firm following Apple\’s report for the December quarter, due out later today. Analysts are currently expected iPad shipments for the quarter to come in the 22 million-to-23 million range, though strong holiday sales of the iPad mini may boost that figure higher.

Apple Inc.\’s investors may not have been too pleased with the relatively high price of the iPad mini that was unveiled on Tuesday, but Amazon.com shareholders appeared to breath a small sigh of relief.

Given another disappointing update from Research In Motion Ltd. on Friday morning, market observers might be forgiven if asking whether the newly launched Kindle Fire from Amazon.com has driven another nail in the company’s supposed coffin.

Prior to the opening bell, RIM RIMMCA: RIM issued some preliminary numbers for its quarter ended Nov. 26. Among the major disappointments was a further rout for the company’s PlayBook tablet, which shipped only 150,000 units to retailers during the period, which does not account for sales of the device to end users.

The company is taking a $485 million pre-tax charge for “inventory valuation” of the tablet, which likely includes some returns from sellers as well as some aggressive discounting that has pushed the price of the $500 device down to as low as $200 in some cases.

The launch of the Kindle Fire from Amazon.com AMZN last month likely hasn’t helped things for the PlayBook – but certainly was not the sole cause of the tablet’s disappointing reception on the market. Recall that RIM sold only 200,000 units of the device in the August quarter, which was less than half of Wall Street’s expectations for the tablet.

RIM’s tablet was seen as behind the curve from the start. It was priced on par with the lowest iPad from Apple Inc. AAPL, despite offering only a 7-inch touch-screen compared to the latter’s 10-inch size. Also, several software capabilities promised by RIM failed to materialize, such as the ability to run emails from associated BlackBerry smartphones through the tablet.

The Kindle Fire offers a 7-inch screen in a very similar form factor as the PlayBook, which has likely had the effect of setting a price ceiling on tablets in that range. The PlayBook and other 7-inch tablets will have to market themselves against Amazon’s large ecosystem of content that includes books, music and streaming movies as well as the Kindle’s close ties with its Prime shipping service. And the strategy seems to be working. HIS iSuppli released an estimate on Friday morning that the Kindle Fire is expected to take second place in the tablet market for the fourth quarter, with unit sales expected to total a market share of nearly 14% — surpassing the 5% expected by the next-closest iPad rival Samsung.

“Nearly two years after Apple Inc. rolled out the iPad, a competitor has finally developed an alternative which looks like it might have enough of Apple’s secret sauce to succeed,” iSuppi analyst Rhoda Alexander said in a statement. “ Initial market response strongly suggests that Amazon, with the Kindle Fire, has found the right combination of savvy pricing, astute marketing, accessible content and an appropriate business model, positioning the Kindle Fire to appeal to a brand-new set of media tablet buyers. The production plans make it clear that Amazon is betting big on the product.”

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